The 41-year-old told investors yesterday in a letter that
he’s leaving the hedge-fund industry after a trading career
spanning almost two decades. He plans to spend more time with
his family and in his home country Australia.

“It seems like he has lost his mojo,” said Vidak
Radonjic, managing partner at Beryl Consulting Group LLC in
Jersey City, New Jersey, which advises clients on investing in
hedge funds. “Hedge-fund traders should be making money in both
rising and falling markets.”

Coffey, who has lost money for clients in the past two
years, follows other high-profile hedge-fund managers to step
away from trading as Europe’s sovereign-debt crisis and concerns
over global economic growth roils markets. Chris Rokos, 42, a
co-founder of Brevan Howard Asset Management LLP, retired to
“pursue his personal interests,” the London-based firm said in
August. Billionaire energy trader John Arnold, 38, former Morgan
Stanley co-president Zoe Cruz, 57, and oil trader Pierre
Andurand, 35, shuttered their hedge funds this year.

“The demands of my growing family mean that I am unable to
commit to the market with the same intensity going forward,”
London-based Coffey said in the letter, a copy of which was
obtained by Bloomberg News.

High Praise

Coffey, who is co-chief investment officer of Moore’s
European business, will return client money from his GC Emerging
Macro Fund as of Nov. 30, he said in the letter.

Coffey, whom billionaire founder Louis Moore Bacon called
“one of the most impressive traders in the world” when he
hired him four years ago, has had mixed performance since
joining New York-based Moore. That had fueled speculation among
investors that he might leave.

Assets in Coffey’s macro fund have slumped to about $450
million from as much as $1.6 billion in 2010. The fund had
fallen about 10 percent this year through August before
recouping most of the loss last month, according to people with
knowledge of the matter, who asked not to be named because the
information is private. The fund lost 5 percent last year.

Enthusiasm Waned

After he had recovered most of this year’s losses in one
week in September, Coffey realized he wasn’t as excited about
his gains as he might have been in the past, two people who know
him said. Coffey then decided it was time to quit, the people
said.

“Greg Coffey has been a significant contributor to Moore’s
European business, and we are disappointed that he is choosing
to retire from the industry,” Bacon, 56, said in an e-mailed
statement yesterday. “We wish him well in all future
endeavors.”

Moore, which manages about $13.5 billion, pulled money from
Coffey’s fund last year and removed hard-to-sell assets that he
inherited when he joined the firm, people with knowledge of the
matter said at the time. The move was a mutual decision between
Bacon and Coffey to cut the trader’s capital amid markets
plagued by the European sovereign-debt crisis, the people said.

Coffey has returned an annualized 4.5 percent since he
joined Moore in November 2008. Emerging-market funds have
climbed 7.9 percent a year, while all hedge funds have gained an
average of 6.5 percent in the same period, according to Hedge
Fund Research Inc.

Moore Stake

The firm last year renamed Coffey’s emerging-markets macro
fund, and two vehicles he started in 2009, to add his initials
as part of a rebranding of his products. One fund focuses on
emerging-market stocks and lost 16 percent this year through
September, while the other trades emerging-market currencies and
fixed-income securities and fell 2.3 percent, according to
investors.

Emerging-market stock funds rose an average of 5.5 percent
this year through September, while emerging-market debt funds
declined 2.2 percent and macro funds dropped 0.5 percent,
according to data compiled by Bloomberg. Hedge funds gained an
average of 3.6 percent.

Darren Read, who ran the stock fund with Coffey, will
continue to manage the fund and investors will have the option
to pull their money as of the end of November, one of the people
said. Eric Dannheim, Coffey’s deputy, will continue to oversee
the debt fund, from which investors can redeem on a monthly
basis.

Coffey was the first trader to share the CIO title with
Bacon since Moore’s inception 23 years ago. Coffey owned a stake
of between 10 percent and 25 percent in Moore Capital Management
LP as of Feb. 2, according to a document filed by Moore with the
U.S. Securities and Exchange Commission in March.

Some colleagues and investors said they considered Coffey
as a possible successor to Bacon when he eventually steps back
from trading. Bacon didn’t hire Coffey with that intention,
people with knowledge of his thinking said.

GLG ‘Wizard’

Coffey joined Moore with his 12-person team from London-based GLG Partners Inc., where he oversaw more than a quarter of
the hedge fund’s $24 billion of assets in 2008 before he left
the firm.

The U.K.’s Sunday Times dubbed Coffey the “Wizard of Oz”
in a nod to his homeland after his fund surged 51 percent in
2007 and 60 percent in 2006 amid a rally in emerging markets.

Coffey was GLG’s top performer, winning industry awards for
his funds. Events started going awry for him in 2008 when he
began losing money, and he subsequently resigned in April that
year, triggering a slump in GLG’s shares and prompted investor
redemptions.

Coffey lost money for GLG clients in 2008 when some of his
investments became illiquid during the global financial crisis.

Coffey was the 11th-wealthiest hedge-fund manager in the
U.K., with an estimated net worth of 260 million pounds ($420
million), London’s Sunday Times reported in April. He paid about
5 million pounds two years ago for an 11,500-acre (4,650-hectare) estate, complete with its own shooting grounds, on the
Scottish island of Jura. Coffey bought two mansions in Sydney in
2005 and 2006, people familiar with the matter said.

Moore Changes

He graduated in 1994 from Sydney’s Macquarie University and
started his career at Bankers Trust Corp., according to fund
marketing materials. Coffey worked at Blue Border, a George
Soros-backed hedge fund, and Bank Austria, before joining GLG in
2003.

Coffey’s departure is the latest in a series of changes at
Moore Capital. Bacon told clients in August that he planned to
return about $2 billion, or about 25 percent of his main fund,
to investors, saying it may be too big for him to generate
returns in line with historic profits as “liquidity and
opportunities have become more constrained.”

The firm cut as many as 15 investment jobs last month as
part of a restructuring of its equity teams, three people with
knowledge of the matter said at the time.